Essays on the Economics of Intellectual Property Protection

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This thesis consists of an introductory chapter and four essays. Each of the four essays utilises a quite different methodology. The first essay considers optimal patent policy when the innovator has the option of keeping the innovation secret. The analysis is conducted under the usual partial equilibrium assumptions. In the second essay, optimal patent policy is addressed in a general equilibrium environment by adopting a well-specified search model. The notion of a patent as an option to wait for market introduction is formalised in the third essay, which has been jointly written with Vesa Kanniainen. This essay is based on the theory of real options. While the three first essays subsist in the imaginary world of economic models, a detailed inquiry in a real-world innovation project is made in the last essay, jointly written with Klaus Kultti. In trying this case to the theory of incomplete contracts, the authors evaluate whether some events in the project are relevant beyond their particular focus and specification.

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